Word: drexel
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Dates: during 1980-1989
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...subject Milken studiously avoided was the intensive 22-month federal probe of the junk-bond department he heads at the Drexel Burnham Lambert investment firm, but the matter soon forced itself on him. Suddenly his lawyer . was summoned from the room. Within minutes he returned and led Milken away. Down the hall the attorney informed Milken that a long-feared moment had arrived: the Securities and Exchange Commission was filing a weighty civil complaint against him, his employer and several colleagues...
...case could be a turning point in the fortunes of Wall Street's most go- getter firm, the financing machine that drove much of the corporate raiding of the roaring 1980s. The complaint charged Milken and Drexel with a whole catalog of offenses, including fraud against the firm's own clients, insider trading, the "parking" of stocks to conceal their true ownership, and the destruction of accounting records to cover up the transgressions...
...They've thrown the book at them, almost every violation of the 1934 Securities and Exchange Act," said Edward Brodsky, a Wall Street lawyer and former U.S. Attorney. Potentially the most devastating charge was the accusation that Drexel, the fifth largest U.S. investment firm (1987 revenues: $3.2 billion), had cheated some of its important customers. Said Brodsky: "That is raw stuff...
...casts the Beverly Hills-based Milken as the mastermind of a secret, bicoastal arrangement with Ivan Boesky, the Manhattan financier now serving a three-year prison term for insider trading. From 1984 until late 1986, according to the Government, Boesky secretly bought and sold huge blocks of stock at Drexel's behest to push forward the firm's takeover deals and to reap millions of dollars in illicit profits. Five others were charged as participants in Drexel's schemes: Milken's younger brother Lowell, an attorney who works in the company's junk-bond department; Cary Maultasch and Pamela Monzert...
...asks that the defendants be forced to return profits they made from the alleged scams, along with any losses they avoided, plus a fine of triple that total. The complaint leaves the court to calculate that number, but estimates put it as high as several hundred million dollars. If Drexel and company lose the case, the SEC could also impose penalties ranging from censure to banishment from the securities business...